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Karl Marx was supposed to be dead and buried. With the collapse of the Soviet Union and China’s Great Leap Forward into capitalism, communism faded into the quaint backdrop of James Bond movies or the deviant mantra of Kim Jong Un. The class conflict that Marx believed determined the course of history seemed to melt away in a prosperous era of free trade and free enterprise. The far-reaching power of globalization, linking the most remote corners of the planet in lucrative bonds of finance, outsourcing and “borderless” manufacturing, offered everybody from Silicon Valley tech gurus to Chinese farm girls ample opportunities to get rich. Asia in the latter decades of the 20th century witnessed perhaps the most remarkable record of poverty alleviation in human history — all thanks to the very capitalist tools of trade, entrepreneurship and foreign investment. Capitalism appeared to be fulfilling its promise — to uplift everyone to new heights of wealth and welfare.

Or so we thought. With the global economy in a protracted crisis, and workers around the world burdened by joblessness, debt and stagnant incomes, Marx’s biting critique of capitalism — that the system is inherently unjust and self-destructive — cannot be so easily dismissed. Marx theorized that the capitalist system would inevitably impoverish the masses as the world’s wealth became concentrated in the hands of a greedy few, causing economic crises and heightened conflict between the rich and working classes. “Accumulation of wealth at one pole is at the same time accumulation of misery, agony of toil, slavery, ignorance, brutality, mental degradation, at the opposite pole,” Marx wrote.

A growing dossier of evidence suggests that he may have been right. It is sadly all too easy to find statistics that show the rich are getting richer while the middle class and poor are not. A September study from the Economic Policy Institute (EPI) in Washington noted that the median annual earnings of a full-time, male worker in the U.S. in 2011, at $48,202, were smaller than in 1973. Between 1983 and 2010, 74% of the gains in wealth in the U.S. went to the richest 5%, while the bottom 60% suffered a decline, the EPI calculated. No wonder some have given the 19th century German philosopher a second look. In China, the Marxist country that turned its back on Marx, Yu Rongjun was inspired by world events to pen a musical based on Marx’s classic Das Kapital. “You can find reality matches what is described in the book,” says the playwright.

That’s not to say Marx was entirely correct. His “dictatorship of the proletariat” didn’t quite work out as planned. But the consequence of this widening inequality is just what Marx had predicted: class struggle is back. Workers of the world are growing angrier and demanding their fair share of the global economy. From the floor of the U.S. Congress to the streets of Athens to the assembly lines of southern China, political and economic events are being shaped by escalating tensions between capital and labor to a degree unseen since the communist revolutions of the 20th century. How this struggle plays out will influence the direction of global economic policy, the future of the welfare state, political stability in China, and who governs from Washington to Rome. What would Marx say today? “Some variation of: ‘I told you so,’” says Richard Wolff, a Marxist economist at the New School in New York. “The income gap is producing a level of tension that I have not seen in my lifetime.”

Tensions between economic classes in the U.S. are clearly on the rise. Society has been perceived as split between the “99%” (the regular folk, struggling to get by) and the “1%” (the connected and privileged superrich getting richer every day). In a Pew Research Center poll released last year, two-thirds of the respondents believed the U.S. suffered from “strong” or “very strong” conflict between rich and poor, a significant 19-percentage-point increase from 2009, ranking it as the No. 1 division in society.

The heightened conflict has dominated American politics. The partisan battle over how to fix the nation’s budget deficit has been, to a great degree, a class struggle. Whenever President Barack Obama talks of raising taxes on the wealthiest Americans to close the budget gap, conservatives scream he is launching a “class war” against the affluent. Yet the Republicans are engaged in some class struggle of their own. The GOP’s plan for fiscal health effectively hoists the burden of adjustment onto the middle and poorer economic classes through cuts to social services. Obama based a big part of his re-election campaign on characterizing the Republicans as insensitive to the working classes. GOP nominee Mitt Romney, the President charged, had only a “one-point plan” for the U.S. economy — “to make sure that folks at the top play by a different set of rules.”

Amid the rhetoric, though, there are signs that this new American classism has shifted the debate over the nation’s economic policy. Trickle-down economics, which insists that the success of the 1% will benefit the 99%, has come under heavy scrutiny. David Madland, a director at the Center for American Progress, a Washington-based think tank, believes that the 2012 presidential campaign has brought about a renewed focus on rebuilding the middle class, and a search for a different economic agenda to achieve that goal. “The whole way of thinking about the economy is being turned on its head,” he says. “I sense a fundamental shift taking place.”

The ferocity of the new class struggle is even more pronounced in France. Last May, as the pain of the financial crisis and budget cuts made the rich-poor divide starker to many ordinary citizens, they voted in the Socialist Party’s François Hollande, who had once proclaimed: “I don’t like the rich.” He has proved true to his word. Key to his victory was a campaign pledge to extract more from the wealthy to maintain France’s welfare state. To avoid the drastic spending cuts other policymakers in Europe have instituted to close yawning budget deficits, Hollande planned to hike the income tax rate to as high as 75%. Though that idea got shot down by the country’s Constitutional Council, Hollande is scheming ways to introduce a similar measure. At the same time, Hollande has tilted government back toward the common man. He reversed an unpopular decision by his predecessor to increase France’s retirement age by lowering it back down to the original 60 for some workers. Many in France want Hollande to go even further. “Hollande’s tax proposal has to be the first step in the government acknowledging capitalism in its current form has become so unfair and dysfunctional it risks imploding without deep reform,” says Charlotte Boulanger, a development official for NGOs.

His tactics, however, are sparking a backlash from the capitalist class. Mao Zedong might have insisted that “political power grows out of the barrel of a gun,” but in a world where das kapital is more and more mobile, the weapons of class struggle have changed. Rather than paying out to Hollande, some of France’s wealthy are moving out — taking badly needed jobs and investment with them. Jean-Émile Rosenblum, founder of online retailer Pixmania.com, is setting up both his life and new venture in the U.S., where he feels the climate is far more hospitable for businessmen. “Increased class conflict is a normal consequence of any economic crisis, but the political exploitation of that has been demagogic and discriminatory,” Rosenblum says. “Rather than relying on (entrepreneurs) to create the companies and jobs we need, France is hounding them away.”

The rich-poor divide is perhaps most volatile in China. Ironically, Obama and the newly installed President of Communist China, Xi Jinping, face the same challenge. Intensifying class struggle is not just a phenomenon of the slow-growth, debt-ridden industrialized world. Even in rapidly expanding emerging markets, tension between rich and poor is becoming a primary concern for policymakers. Contrary to what many disgruntled Americans and Europeans believe, China has not been a workers’ paradise. The “iron rice bowl” — the Mao-era practice of guaranteeing workers jobs for life — faded with Maoism, and during the reform era, workers have had few rights. Even though wage income in China’s cities is growing substantially, the rich-poor gap is extremely wide. Another Pew study revealed that nearly half of the Chinese surveyed consider the rich-poor divide a very big problem, while 8 out of 10 agreed with the proposition that the “rich just get richer while the poor get poorer” in China.

Resentment is reaching a boiling point in China’s factory towns. “People from the outside see our lives as very bountiful, but the real life in the factory is very different,” says factory worker Peng Ming in the southern industrial enclave of Shenzhen. Facing long hours, rising costs, indifferent managers and often late pay, workers are beginning to sound like true proletariat. “The way the rich get money is through exploiting the workers,” says Guan Guohau, another Shenzhen factory employee. “Communism is what we are looking forward to.” Unless the government takes greater action to improve their welfare, they say, the laborers will become more and more willing to take action themselves. “Workers will organize more,” Peng predicts. “All the workers should be united.”

That may already be happening. Tracking the level of labor unrest in China is difficult, but experts believe it has been on the rise. A new generation of factory workers — better informed than their parents, thanks to the Internet — has become more outspoken in its demands for better wages and working conditions. So far, the government’s response has been mixed. Policymakers have raised minimum wages to boost incomes, toughened up labor laws to give workers more protection, and in some cases, allowed them to strike. But the government still discourages independent worker activism, often with force. Such tactics have left China’s proletariat distrustful of their proletarian dictatorship. “The government thinks more about the companies than us,” says Guan. If Xi doesn’t reform the economy so the ordinary Chinese benefit more from the nation’s growth, he runs the risk of fueling social unrest.

Marx would have predicted just such an outcome. As the proletariat woke to their common class interests, they’d overthrow the unjust capitalist system and replace it with a new, socialist wonderland. Communists “openly declare that their ends can be attained only by the forcible overthrow of all existing social conditions,” Marx wrote. “The proletarians have nothing to lose but their chains.” There are signs that the world’s laborers are increasingly impatient with their feeble prospects. Tens of thousands have taken to the streets of cities like Madrid and Athens, protesting stratospheric unemployment and the austerity measures that are making matters even worse.

So far, though, Marx’s revolution has yet to materialize. Workers may have common problems, but they aren’t banding together to resolve them. Union membership in the U.S., for example, has continued to decline through the economic crisis, while the Occupy Wall Street movement fizzled. Protesters, says Jacques Rancière, an expert in Marxism at the University of Paris, aren’t aiming to replace capitalism, as Marx had forecast, but merely to reform it. “We’re not seeing protesting classes call for an overthrow or destruction of socioeconomic systems in place,” he explains. “What class conflict is producing today are calls to fix systems so they become more viable and sustainable for the long run by redistributing the wealth created.”

Despite such calls, however, current economic policy continues to fuel class tensions. In China, senior officials have paid lip service to narrowing the income gap but in practice have dodged the reforms (fighting corruption, liberalizing the finance sector) that could make that happen. Debt-burdened governments in Europe have slashed welfare programs even as joblessness has risen and growth sagged. In most cases, the solution chosen to repair capitalism has been more capitalism. Policymakers in Rome, Madrid and Athens are being pressured by bondholders to dismantle protection for workers and further deregulate domestic markets. Owen Jones, the British author of Chavs: The Demonization of the Working Class, calls this “a class war from above.”

There are few to stand in the way. The emergence of a global labor market has defanged unions throughout the developed world. The political left, dragged rightward since the free-market onslaught of Margaret Thatcher and Ronald Reagan, has not devised a credible alternative course. “Virtually all progressive or leftist parties contributed at some point to the rise and reach of financial markets, and rolling back of welfare systems in order to prove they were capable of reform,” Rancière notes. “I’d say the prospects of Labor or Socialists parties or governments anywhere significantly reconfiguring — much less turning over — current economic systems to be pretty faint.”

That leaves open a scary possibility: that Marx not only diagnosed capitalism’s flaws but also the outcome of those flaws. If policymakers don’t discover new methods of ensuring fair economic opportunity, the workers of the world may just unite. Marx may yet have his revenge.

North Korea is not a Marxist country by the way, in none of their present writings do you see any mention of Marxism. They follow an ideology based on nationalism and "survival of the fittest" called Juche. North Korea is a National-Socialist country and is not Marxist anymore ever since the adoption of Juche. Marxism is anti-nationalist and North Korea is nationalistic, "Nationalistic Communism" is an oxymoron. North Korea now also uses Mein Kampf instead of the "Communist Manifesto". See the book "The Cleanest Race".

Also Trotsky warned that a planned economy must be democratic or else it would fail. Marxism seeks to pursue direct democracy, complete domination of the majority over the minority. The minority deserve NO "protection" from the will of the majority whatsoever and the majority should all own guns as marx said. The creators of 20th century "communism" or "socialism" are traitors to the original ideology by abandoning the pursuit of direct democracy.

The state must be a majority dictated state which it wasn't in most of 20th century socialism. Article refuted, it also ignores the Paris Commune attempt of 1871 which was truly democratic and successful though invaded and massacred.

Okay, we get it....unregulated capitalism sucks. But Marx is just even
worse when you read his Communist Manifesto. The guy calls for a
complete overthrow of any Democracy at the namesake of workers. Heck, just ask Eastern Europeans like the Polish and Romanians. They will tell you how Communism
suckered everyone to believe in the land of utopian milk and honey while their
own country was leading itself on the road of economic ruin and poverty.

@BenjaminGroetsch He does not call for the overthrow of democracy. He calls for the overthrow of a republic for a majority dominated state and system which wasn't really done. In an actual Democracy the minority have no "protection" from the majority unlike in a fakeass "republic". The minority deserve no "protection" from the will of the majority whatsoever, mob rule and arming all people is the best way to renew democracy. This was done in the Paris Commune of 1871 but the ideological-traitors shifted away from the notion of direct-democracy.

Trotsky adhered to that notion and today Trotskyism seeks to bring back this Socialism done in the Paris Commune of 1871 that Marx wanted and not even Lenin.

@BenjaminGroetsch Trotsky said that planned economies which aren't democratic are doomed to fail, we will never and will not recognise this fake which betrayed the original Marxism by shifting away from the pursuit of direct-democracy and a majority controlled system. Rule and complete domination of the majority over the minority, a majority dictated state and society.

@theworldbeyond @theworldbeyond just like Chile proved that neoliberalism and any form of capitalist ideology are a TOTAL FAILURE? Friedman's policies were an absolute disaster for its people. Does this mean capitalism is a failure? No; it means the way that it was practised in that country was a failure, just as was Stalinism in Russia (who the hell would not have expected that?) and Maoism in China. No system has implemented communism in the way that it should have been implemented, except Cuba, which comes as close as does America implementing libertarianism. You've oversimplifying things by suggesting that one country's experiment with what you deem to be Marxism (it wasn't; hence why it was called Maoism) means that communism is a total failure.

Likewise, Cuban communism has worked in a flawed way, just as capitalism has all over the Western world has also been deeply flawed, and yet people in these countries think it's the "best we've got", a statement with which no doubt many Cubans would also agree. Now the West is in decline, China's unholy alliance between both ideologies is under strain, it shows that there is no clear way forward.

such a nuanced and informed approach/response however is unlikely to appeal to morons like @theworldbeyond who prefer everything in simple black and white: capitalism = good, communism/socialism = bad. we = good, "they" = bad. and on and on. He's been conned, like most of western society, by the crony capitalists to spout their lines for them even though he's part of the class of people being hurt by their "trickle-down" bs and other self-serving ideologies.

can't blame him though - the lamestream media has fed him a bunch of BS for decades. it's no wonder the majority of people can't see the forest for the trees anymore.

I really enjoyed this article and found it very informative. Perhaps, being of a generation that grew up during the Cold War in the United States and was told that capitalism is the best of all possible worlds, whom, since the financial crash, finds itself with few future prospects other than ecological destruction and low-wage labor, I don't find, as Michael Schuman does, the prospect of workers of the world uniting all that scary.

Marx's great insight is about the contradictions of capitalism not communism. His story may just be playing out over a longer period of time but class polarization is in the air the question is can the for profit media keep us distracted enough so we don't realize it until we ear the whole planet.

Sadly
I think America is ready to blow the rage is palatable and the politicians are
so self obsessed they have totally missed it! Obama and Ms Nancy have
totally missed the boat Sanders and Warren do get it but most are running around
saying they will help the poorest folks mean while with Quantitative Easing
a TAX on bank depositors. And the Social Security Trust the only program that units us our government the President I voted for put it on the table to be chained!! Now if they means test and chain it it becomes a TAX Think of it thie way wages and tax

Federal.plus

State and

Fica TAX not benfit payed for but Welfare Program you tatex is above Mitt Romney of anyone making over a million a year Welcome to Tyanny!!

We are the folks suffering
far more then we admit. Republicans
are worrying about woman's body's and protecting the super rich who pay far less
tax then us. T Obama and Nancy take care of the welfare folks and they don't care where they get it from just give ti to us! And then theirs us we
who worked saved and got destoryed by the people who were sworm to protect us and deed we pay ed for their wages.we are mad beyond belief and we would die before
taking hand out!! We are ready when the match go's... and meany now have guns I would
have supported the gun reform five years ago not now keep your gun and the more
rounds the better!!! Tyanny is why we have the amendment and this is tyranny in
America now !

The only Country that trans Natioan Corp have not foold is ICELAND they did what is BEST for their people. Put the bankers in Jail got a government forthe people gave 125 thousand dollars to underwater home owners ! Saved the people and let the banks fall no bonus started new banks were 6.7 in red first gained2.7 second and third they are int the black and making money no debt...Think about which one of us did the right thing da.. ICELAND

The lesson that Europe learned from the catastrophe of the Second World War is that capitalism needs social democracy, and the prevention of extreme inequality, simply in order to survive. What is missing from our discussions on capitalism is the acknowledgement that a small but sizeable minority of humanity - people with narcissistic personality disorder - are psychologically incapable of grasping the concept of equality and struggle with all their might to prevent capitalism becoming the win-win system it can clearly be. Some countries have learned to constrain this dangerous minority better than others.

@nonlocal -- you're forgetting that "Marx's system" has never really been employed. "Marxism" is not necessarily the same thing and can vary widely. Your dogma in the form of political shill is more of the same drivel we've been suffering as mainstream discourse in the U.S. An honest analysis of the system, which Marx tried to accomplish, is much needed and increasingly in demand.

Well, you seem to gloss over the fact that Marx's system created the worst possible environment for the average worker in both the USSR and China. As anyone who truly understands human nature would have predicted, the noble communist workers party officials became extremely rich and powerful while the mass working class became poorer and poorer (but equally so among themselves so it was "fair" right Obama?!).

Ironically while China moves in fits and starts to a fairer system (and ultimately to a multiparty political system), our corrupt leaders in the Democrat party are driving the ignorant masses into the old Chinese system where the only rich are the politicians (and you idiots in the press fall for and reinforce it).

You miss the fact that the ever growing, cancerous, great society, welfare dependency system based on Marx ideas, is the very cause of our languishing competitiveness as a society. So while we flail with socialist ideas of stimulus, higher minimum wage, all sorts of tax credits, subsidize more medical care, pay people not to work on so called "disability", etc etc; we are slowly getting our asses handed to us by a more and more competitive world labor market.

The core problems with western society are the Marxist remnants that have yet to be crushed and destroyed.

Read Marx little piece called "On Money" - it is a description the Ol' US of A today. We fit every example of how Capitalism destroys its host country, culture and economy. The "lynch-pin" is there it is just a matter of time. How long did it take the state capitalist USSR to fall - a year?

The problem with capitalism is that the government slowly got involved more and more like Marc suggested over the last 50-70 years starting with FDR and is been a slow downward progression. We don't have free markets, we have weird half attempts at central planning. It's gross because it's Marx and Marx was a moron.

The political class seem oblivious to events in the real world, continuing to pursue the same policy direction in spite of the disastrous consequences of austerity. They blindly support the "trickle down" concept of making the rich, richer with no account of the consequences for the poor and the vulnerable. The rich threaten to leave and take their money with them if domestic governments suggest more progressive and equitable taxation regimes….and, yet, the rich spend no money in these domestic economies - investing abroad to exploit child and virtual slave labour; they live abroad for substantial parts of the year to avoid paying their share of (or even any) tax; they create no jobs and contribute nothing except to promote a culture of demonisation of the poor and the working class. This cannot go on…The sleeping giant of labour must awaken and, as if in the land of Lilliput, we will witness that "When Gulliver awoke, he snapped their chains with ease…"

Capitalism is finished. However, capitalists still walk among us, dictate policies to complaint governments, and continue, zombie-like, to strive to accumulate even more wealth, while causing the destruction of the very bases of human existence. In the US, liberals historically have saved capitalism from capitalists. Today, however, they serve the interests of international finance (Austerity, bailouts, ZIRP). And that sucker, as the repulsive Bush 43 said in a different context, is goin' down.